The South African rand jumped 0.93 percent to 16.14 South African Rand to US$1 during the early trading sessions in Asia today, Monday, November 29. The currency recovered from last Friday’s one-year low at 16.3675 South African Rand per US$1.
We are eager to share this foreign exchange-related news with our readers. We think it gives them an idea of how the foreign currencies, including the South African rand, react amid the rising fears over the new omicron coronavirus or COVID-19 variant.
Based on the report posted online by markets, business, and finance news outlet CNBC, South Africa discovered the new COVID-19 variant last week. Countries worldwide have been fast to tighten border controls with mutations in the spike protein of the omicron variant, suggesting it could be resistant to current coronavirus or COVID-19 vaccines.
Besides the South African rand, other foreign currencies recovered from the omicron chaos. The Canadian dollar rebounded with the greenback sliding 0.57 percent to C$1.2726, which is off the previous session’s two-month high at C$1.2800.
The Australian dollar recuperated after a one-percent tumble last Friday, November 26, that saw it dip to $0.71125 for the first time since August 20. This risk-sensitive currency surged 0.37 percent to US$0.7139.
The safe-haven Japanese yen had been the biggest beneficiary of the flight to quality. It slipped 0.25 percent to 113.75 yen per dollar.
The Japanese official currency increased as much as 2 percent at one point on Friday to 113.05 yen. The euro jumped 0.98 percent on Friday as traders closed out short positions.
This single market currency slipped 0.23 percent to US$1.1290. Meanwhile, the British pound sterling was roughly flat at US$1.3335, which is off Friday’s 11-month low at US$1.3278.
Despite the South African rand and other foreign currencies’ recovery, foreign exchange analysts cautioned more volatility. After all, there are still minimal details about the new strain of the coronavirus.
Joseph Capurso said that they anticipate the foreign currencies to be volatile this week. This strategist at Commonwealth Bank of Australia pointed out that it would not take many negative reports about the omicron variant to push the Australian dollar below US$0.70.
Rodrigo Catril wrote in a client note that until then, market volatility is likely to stay elevated. This senior foreign-exchange strategist at National Australia Bank also cited that the markets have been forced to reassess the international growth outlook until more information gets released.
We feel a bit relieved to learn that the South African rand and other currencies in the global currency markets calmed earlier today during the Asian trading session. This event comes following the initial shock of discovering the omicron coronavirus variant that resulted in investors scurrying for cover last week.
As foreign exchange analysts warned that more volatility would happen this week and in the coming days, we want to advise our readers to monitor the upcoming developments. If they would be exchanging the South African rand with the US dollar, perhaps now is the right time to do that.
We highly recommend our readers hold on to their South African rand or other foreign currency units and wait until the exchange rate is in their favor. In this way, they can get more for their money.